A class action by investors has got under way in a £100m compensation battle against two insurance giants.

Opening submissions have been given in the high court case against island-based Friends Provident International and Utmost International Isle of Man.

Both companies are contesting the claims.

More than 700 investors are involved in the class action, many who lost their life savings, with the case scheduled to last seven weeks. The trial is being heard in one courtroom at the high court in Douglas with a live link to a second.

In an opening submission by the claimants given on Monday, the court heard that the litigation centres on ‘wrappers’ offered by FPI and Utmost to retail investors, by which they could allocate their invested funds into underlying funds not operated by FPI or Utmost.

Investments were made through the payment of premiums.

The products were marketed through independent financial advisers and intermediaries not employed by either FPI or Utmost.

However, it is alleged the marketing was undertaken on the basis of documentation and information from FPI/ Utmost which was passed on directly to potential customers.

The claimants argue that the investments were marketed as ‘low risk’ and ‘safe’ for retail investors, rather than being in funds that were only available for institutional investors.

Denied by both FPI and Utmost, the claimants argue that the companies misrepresented the products, and that they failed to carry out ‘some minimum standard of due diligence review’ on the underlying funds.

The funds at issue in the claim all collapsed, leaving the investments of the claimants worthless but still subject to management fee charges.

The most notorious of the collapsed funds was the Axiom Legal Financing Fund, which was suspended in 2012 and its founder jailed for 14 years for fraud.

Other funds offered on the platforms included LM Group (collapsed in March 2013 owing AUS$1bn), Eco Resources (liquidated in August 2016) and the Kijani funds (liquidated in June 2015). There was also New Earth Solutions Recycling Facilities sterling investment sub-fund and the Eco Resources Fund.

The claimants say that 100% of capital invested was at risk of immediate loss upon the failure of any of the underlying funds.

But the court was told it was not the case that there were total losses and that some investors got significant sums for their investments.

On Tuesday, FPI and Utmost gave their opening submissions. FPI is bringing a counterclaim based on the fact that the claimant signed standard-form disclaimers at the point of investing.

One such disclaimer read: ‘Before you invest in any specialist funds through your policy. Friends Provident International Limited wishes to ensure that you are aware of the nature and possible risks associated with them.’

Investors were required to sign declarations which included it was the applicants’ responsibility to ensure that the fund was suitable, bearing in mind their investment objectives and attitude to risk.

They also had to acknowledge that FPI was not responsible for any loss suffered or reduction in the value of their policy arising from their investment.

But one claimant, civil engineer Thomas Smiles noted: ‘I know that lots of companies write similar disclaimers in long contracts. I trusted FPI to safeguard my money because of its reputation and did not pay close attention to the contract terms.’

Jonathan Nash KC, representing FPI, said the investors’ claim would imply an ‘open-ended obligation’ on the company to ‘investigate assets to a significant degree’ - and this would present a ‘potentially extremely onerous’ duty of care.